Toshiba CEO Expected to Resign After Huge Westinghouse Writedown

April 20, 2016, 9:11 AM UTC
Toshiba Corp. President Masashi Muromachi Attends Earnings News Conference
Masashi Muromachi, chairman and president of Toshiba Corp., attends a news conference in Tokyo, Japan, on Monday, Sept. 7, 2015. The manufacturer of chips and nuclear reactors released earnings on Monday after it delayed them last week on the discovery of new accounting irregularities related to a U.S. unit's construction project. Photographer: Kiyoshi Ota/Bloomberg via Getty Images
Photograph by Kiyoshi Ota — Bloomberg via Getty Images

Japan’s Toshiba Corp is preparing to write down the value of its stake in U.S. nuclear subsidiary Westinghouse by around 200 billion yen ($1.83 billion), sources familiar with the matter said on Wednesday.

Separately, a company committee is meeting on Wednesday to approve the resignation of Chief Executive Masashi Muromachi, said one of the sources, who requested anonymity because they were not authorized to speak with media.

The electronics conglomerate has been eager to put last year’s $1.3 billion accounting scandal behind it and move on with streamlining its bloated businesses, whose poor performances have been masked by years of false book-keeping.

Fears over Toshiba’s finances and the possibility of more writedowns have lingered among investors. Toshiba had said last month that it was conducting a stress test to see whether it would need to write down its nuclear business.

Nuclear power has become less popular since Toshiba’s investment in Westinghouse in 2006, especially in the aftermath of the 2011 Fukushima disaster.

On Wednesday, the company said it had not yet finalized results from that test. It declined to comment on Muromachi’s possible resignation.

Muromachi took over the Japanese laptops-to-nuclear conglomerate last July after his predecessor and a slew of other top executives resigned for their roles in the country’s biggest accounting scandal in years.

He had said in September that he did not plan to stay in his CEO role for too long, and that he wanted to hand over to a successor after ensuring the company was on track to recovery.

Muromachi has expressed a desire to step down as early as June, the Sankei newspaper reported earlier on Wednesday, without citing sources.

His successor is expected to be one of Toshiba’s three senior executive vice presidents, with Yasuo Naruke, who heads the core chip business, the likely front-runner, it said.